In a major upheaval, Sompo Holdings is set to experience a significant leadership change. Chairman and Group CEO Kengo Sakurada is resigning at the end of March, a decision linked to subsidiary Sompo Japan Insurance’s involvement in a scandal with Bigmotor, a used-car dealer. Mikio Okumura, currently the president and group COO, will replace Sakurada. Breaking from tradition, Sakurada will not transition into an advisory role and will also vacate his board position at Sompo Japan Insurance.
Sakurada’s departure marks the end of an era; he has been at the helm since becoming the president of a Sompo Holdings predecessor in 2010. His leadership extended over a decade, including a tenure as chairman of the Japan Association of Corporate Executives. The company also announced the replacement of Sompo Japan Insurance President Giichi Shirakawa with Vice President Koji Ishikawa, effective from the end of January.
This leadership turnover occurs amidst ongoing controversies. Sompo Japan Insurance is implicated in two scandals: one involving Bigmotor, accused of inflating insurance claims, and another concerning price-fixing. The Financial Services Agency (FSA) of Japan has criticized Sompo Japan Insurance for inadequate claim screenings and resuming business with Bigmotor, despite knowing of the fraud allegations.
The FSA’s imminent business improvement order to Sompo Holdings and Sompo Japan Insurance underscores the severity of the situation. It highlights major management failures and inadequate corporate governance, as outlined in a recent legal investigation. The companies are expected to announce comprehensive responses to these scandals next month, including additional executive resignations. Sompo Holdings will soon hold a press conference to address these developments and outline its future direction.
